THCB

Praying For Obamacare to Fail

“Make it work.”

This advice on health reform to Democrats earlier this month illustrates that President Clinton knows what the opponents of Obamacare also know: success is the best political revenge.

As the health reform law moves off the drawing board into the real world, its opponents are doing their best to make it not work — by shifting their energies from fulminations about the boogeymen they imagine in the law to hampering, complicating or outright obstructing its implementation.

For openers, half the states have announced they will probably not expand their Medicaid programs under the law — though there have been defectors, most notably Florida. This will leave a large segment of the uninsured priced out of even the subsidized insurance markets created under Obamacare, while adding enormous complexity and uncertainty for small businesses and multi-state employers who want to comply with the law and cover their lower-income workers.

The same states, more or less, are also refusing to establish health insurance exchanges — online marketplaces where small businesses and individuals can purchase private health insurance — the fulcrum of the law’s provision for those not covered by Medicaid. As of last Friday’s deadline, 24 states and the District of Columbia were going ahead with exchanges and 26 were not.

While the refusenik states generally cleave to the red state/blue state divide, two Democratic governors went the other way, while three Republican governors have chosen to implement the law and build exchanges — each for interestingly divergent political reasons. Things were messiest in Kansas and Mississippi, where Republican governors went to war with their own insurance commissioners over the matter and ultimately prevailed. In New Jersey, Governor Chris Christie simply vetoed the exchange bill passed by his own legislature.

Stand-offs between a state’s insurance commissioner and governor are especially illustrative of how critical exchanges are to the implementation of Obamacare. The job of an IC is to regulate a chronically dysfunctional insurance marketplace, impose transparency on an industry that thrives on obfuscation, and deal with the everyday disasters of people who cannot access insurance or were shafted on insurance they thought they had. The job of a governor is to direct the political compulsions of a state, ideally through vision and leadership, but too often through grandstanding, in its ugliest form in defiance to the federal government.

While governors just saying no fans the flames of partisanship and makes it more difficult for health reform to succeed on the ground, the substance of the objections about the exchanges — by Republican pols, Wall Street Journal editorial writers, and conservative bloggers alike — have nothing to do with reality. Exchanges are bureaucratic contraptions of immeasurable complexity and cost, they argue, and will not work. But if the exchanges were bridges too far, the vetoed insurance commissioners would not put their own political capital at risk to build them.

As with other ideological about-faces among the president’s critics since market principles emerged along the foundations of his health reform plan, the reality of the exchanges is exactly the opposite of what their critics would have us believe. The health insurance exchanges in Obamacare utilize marketplace ideas and processes to emulate the emerging best practices of today’s employer-based, private health insurance marketplace, expanding and making them available to all.

The exchanges will combine the establishment of a health benefits package, a process for certifying local and national insurers to sell that package, and an online marketplace for small businesses and individuals to pick and choose the best insurer to buy it. For the working poor, they will also credit a sliding scale subsidy toward their purchase. The exchanges represent the Expedia, Hotels.com and Cars.com for health insurance — designed to shed the opacity of three other traditionally inefficiently priced industries — and increase choice, transparency, mobility and competition among insurers for consumers’ dollars.

Those who, like insurance commissioners, actually know what they are talking about when they talk about insurance exchanges, do so for good reason. There are three already operating today, by payroll processing giant ADP and employee benefits management companies AON and Towers Watson. But as with most things in health insurance, the private exchanges are limited to people with health benefits from their employers. Most small businesses, the self-employed, and those who buy their own coverage — the bulk of those of who will benefit most from health reform — are left out, the same way the tax code has always discriminated against their health insurance purchasing and the market has tried to priced them out as expensive nuisances.

The private exchanges represent an incremental but important evolution from what large employers have been doing for decades: allowing employees to pick and choose from a variety of health plans through what many call “benefits portals.” Such portals are complicated, with far more moving parts — dental, vision, child care, extra vacation time — than anything available as part of Obamacare. And yet they work, are updated every fall for “open enrollment,” and provide a good working model for what is possible for the rest of us with the implementation of health reform.

There is much to pick on in the details of the president’s reform plan, and many of its elements will execute less than perfectly in the first few years of its implementation. (Unlike today’s health insurance system, which we all know executes flawlessly.) But governors who, on misinformed ideological principle, are deliberately complicating this implementation — implicitly rooting for and attempting to enable its failure in their own states — are falling into an odd political trap. They may be perfectly willing to abandon their uninsured, underinsured, and working poor as “takers” whose votes do not matter.

But because Obamacare is a federal law, they are merely delegating their undesirables back to the federal government, which is building its own fail-safe exchange. Under the law, when a state cedes their people to the Federal exchange it also cedes away any right to decide which health plans are allowed onto that exchange — effectively giving up any say-so over which insurers will be serving their own citizens. This would be sufficient explanation for why an insurance commissioner would want one enough to defy his or her own governor.

Giving up all that control to the Fed, because your ideology vilifies the Fed as an overreaching control freak, may seem like a Pyrrhic way to make your point. But not to anyone trying to sort anti-Obamacare rhetoric from legislated reality. Nowhere more than here is it obvious that the ideological war over the president’s plan has little to do with health policy and everything to do with politics. The single biggest problem with “Obamacare” is that it now goes by the name its critics foisted on it in derision. It was inevitable that the partisanship inspired by the law’s passage would only intensify with its implementation.

Demagoguery over the exchanges may be particularly loud because, as mentioned earlier, it represents another ideological about-face, an example of the recurring paradox about the main ideas behind Obamacare. Conservatives have been in a frenzy of denial that the central mechanism of the law — the individual insurance mandate — was their idea all along, a fact well documented in public policy literature before I summarized it in a New York Times essay in September. The depth of the fury I inspired across the conservative blogosphere showed the rawness of nerves on this point — especially given my pro-market, pro-business credentials. (It gets lonely in Washington when you believe in capitalism and competition, but have zero interest in the Obama-hating, social conservative goat rodeo currently dismantling the Republican Party.)

The same political paradox applies to the exchanges. As a market-enabling mechanism for ending the dysfunctionality of local health insurance purchasing, the idea emerged not under President Obama, but under President George W. Bush. Exchanges were first championed by his Secretary of Health and Human Services, Michael Leavitt, the former governor of Utah. Not coincidentally, Utah is one of three states with a Republican governor that is building its own exchange or, more precisely and tellingly, adapting the one it built years ago.

Politicians ignore such paradoxes at their own peril. As Mitt Romney learned while attempting to distance himself from his signature accomplishment as governor of Massachusetts, Obamacare’s naysayers are playing a dangerous political game. The Supreme Court has upheld almost the entire law, some of which has already been implemented with narry a whirr from the black helicopters. Nearly three years after its passage, there have been no actual reported health coverage or job losses of any significance — only a steady stream of media reports saying that business lobbies and benefits consultants are all saying that their members and clients are all saying they are thinking about cutting coverage and jobs.

All that remains for those rooting for the failure of Obamacare, now that the Supreme Court has ruled against them, are a handful of nuisance lawsuits, more obstructionism, and the inevitable conflation about every element of implementation that did not work to perfection into an indictment of the entire plan.

Socialized medicine! Government bureaucrats dictating what your doctor can do! No more freedom to choose your own doctor!

Yes, that is what they all said — about Medicare, when it was enacted in 1965. Back then, there was a Greek chorus lamenting how Medicare would drive all physicians from practice and spell the end of medical innovation. I would cite specific members of that chorus — a few of whom were ideological state-level politicians who went on to support Medicare when they rose to national prominence — but the vast majority were policy experts and writers, and almost no readers will recognize their names.

Like those today working to obstruct or complicate the implementation of Obamacare – along with those simply rooting from the sidelines for its failure — they were simply wrong.

Success is the best political revenge.

J.D. Kleinke is a pioneering health care information entrepreneur, medical economist, author, policy expert, and business strategist.

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MD.MAMaxwellkiranreddyNigelMaggie Mahar Recent comment authors
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kiranreddy
Guest

Health is important for all people in world…. this is useful for all people

Health

Nigel
Guest

If some individual states are refusing to take part in running health exchanges, then the task will surely devolve to the federal government – producing an enormous workload, certainly, but one that’s perhaps nearer the idea of the single national health exchange that the House Democrats were originally seeking.

J.D. Kleinke
Guest

This is a great debate, and the perfect embodiment of the sausage grind that gave us the PPACA, and would give us the next attempt. Obamacare sits almost squarely on the midline of the American political continuum because it represents a nearly perfect political hybrid of two opposing and irreconciable political viewpoints. The politics of health reform is the dumping ground for all of America’s ideological and philosophical conflicts (e.g. fairness and equity or efficiency and innovation?) along with all of its culture wars (e.g. birth control and abortion). And so we got what we got: Obamacare. Liberals hate it… Read more »

John Ballard
Guest

**Standing ovation**
**Sustained applause**

Keep up the good work, Dr. Kleinke.

Aquifer
Guest
Aquifer

Mr. K – it is precisely BECAUSE we are talking about people’s lives that I am so critical of “Obamacare” – I was a healthcare professional for over 20 years and was, to put it midly, very much involved with those lives. I am not “rooting for it to fail” – it WILL fail because it was never designed to succeed as a way of providing “affordable healthcare” to all, or even most – if that was truly the purpose, it would not have been designed in the way that it was … This “middle of the road approach” speaks… Read more »

John Ballard
Guest

@Aquifer, get over yourself. I can’t speak for anyone else, but I’ basically a Fabian Socialist and was as enthusiastic as you or anyone else about single-payer or just about anything better than what we got with PPACA. I watched those hearings gritting my teeth as one by one the most important parts were eviscerated. Kleinke said it right when he called it “sausage.” That said, what we have now is not a “plan.” It’s law. And as much as I hate to say it, it’s better than what was there before. The insurance industry is not going away. After… Read more »

Aquifer
Guest
Aquifer

Mr. B – Precisely what “program”, am I supposed to get with? The one that got us this boondoggle? The same one that ensures that “systemically dangerous” institutions such as big banks will continue to be TBTF by bailing them out, then turns around and says we can’t afford, and so must whack, Medicare? The same one that seems to be taking the same approach to insurance companies by guaranteeing them “customers” and subsidizing their income to boot when these same companies have done more to thwart than to facilitate healthcare – THAT Program? Perhaps you have been fighting “dragons”,… Read more »

Maggie Mahar
Guest

J.D. Kleinke

Thank you so much or saying this:

” I’d rather try and believe and e wrong than give into despair. This isn’t the Super Bowl– we are talking about people’s lives.”

Yes.

Patrick Pine
Guest
Patrick Pine

Reread your statement and reread mine. Admit I was not very clear. So some clarification here: For those on either end of the political spectrum who ascribe carefully coordinated conspiracy theories to the primary authors of PPACA – either claiming that Obamacare is designed to fail as a prelude to single payer or those who claim that this is designed to benefit the current big players (insurers, providers) – you are giving people in the US Congress way too much credit for being able to pull together a group that can produce a carefully constructed piece of legislation with a… Read more »

Aquifer
Guest
Aquifer

PP – Not sure who you are replying to …. But it is no secret who basically wrote the legislation – Baucus pointed her out (with gratitude)- Liz Fowler, who came out of one of the big insurance co, don’t remember which, and proceeded to go back there somewhere …And it is no secret that Obama used the so called “public option” as a bargaining chip, puny as it was, to be discarded and that he had made deals with Big Phrma, et.al …. I am a bit confused- you seem to agree that this is an unworkable mess, but… Read more »

Roy Fouts
Guest
Roy Fouts

While a single payer system is the ideal, it is probably not an option since we have gone so far down the fee for service path. Obama Care strives to optimize our hybrid system. It will be fraught with problems all of which will be addressed and patched a little.

Lets seek to understand the fundamental question: Is health care a right or a privilege? The crux of the problem. Until we decide where on that continuum our philosophy resides…all other approaches are just addressing symptoms not the root cause.

Peter1
Guest
Peter1

“While a single payer system is the ideal, it is probably not an option since we have gone so far down the fee for service path.”

Roy, Canada has FFS. It is negotiated with docs every so often. Docs also can withdraw service – to a point, just like any other union. I’m not saying it’s the ideal, but FFS is not a barrier to single-pay.

FFS keeps them working, salary will have to have some method to keep them seeing x number of patients per day.

Roy Fouts
Guest
Roy Fouts

I hear your point.

We are upside down and have known it for a long time. Change will be very difficult…and your patient’s per day issue brings back many memories as a hospital administrator trying to get “owned primary care docs” to understand the economic reality of creating a margin!!!

Aquifer
Guest
Aquifer

Well methinks, although it should be declared a right on simple moral humanitarian grounds, we don’t really need to go there to argue single payer – the economic arguments are clear enough to support it ….

Cynthia
Guest
Cynthia

Obamacare is a huge bailout for the same health care insurance industry that’s long been acting as a blood-sucking parasite on America’s health care system. It’s also been acting as a Keynesian welfare program for overpaid, underworked hospital executives and lazy armchair doctors and nurses who wouldn’t know how to diagnose and treat patients if their life depended on it! There’s some good carrots in Obamacare, but overall, in the long run, it’ll prove to be poisonous. Medicare-for-All was the way to go, but Obama bargained all that away behind closed doors long before the American public had any say.… Read more »

Aquifer
Guest
Aquifer

OK – got the point, you are a fan of Obamacare – but it is not going to be worth a hoot for reasons that have nothing to do with political recalcitrance in implementation at the state level, which, if you stop to think of it was a pretty dumb place for a Fed. program to leave it, doncha think? There are no cost controls – and as insurance co raise their rates, the premiums, co-pays and deductibles will increase out of pocket costs – and does anyone think that a gov’t that is so hung up on “debt” will… Read more »

BobbyG
Guest

There you go. Once everything else has been tried and has failed.

Peter1
Guest
Peter1

“OK – got the point, you are a fan of Obamacare” Yes and no. I support a mandate but not one that forces people into the most expensive system in the world. Health care in the U.S. is still too fractured, lacks transparency and divides patients into privileged and non privileged groups. The “off the income cliff” subsidies will hurt people trying to increase their income and leave many people out who should otherwise get a subsidy (unaffordable family coverage on employer plan). I also don’t trust the exchanges (just insurance companies) to offer affordable coverage as the insurance industry… Read more »

Aquifer
Guest
Aquifer

Peter – my post was directed at the author of the piece, which i suppose i should have made clear (this set up is a bit hard to sort out, methinks…) In any case, given all your very legitimate objections, i am not quite sure what your “yes” applies to – except “mandates” – of what sort? STM that Medicare for All – “everybody in, nobody out” – is all the mandate we in the healthcare system, at least, should need .. As for how soon we could get it – that IS strictly up to us. There are folks… Read more »

Peter1
Guest
Peter1

“i am not quite sure what your “yes” applies to – except “mandates” – of what sort?”

Aquifer, I like no pre-exist, no maximum, as most people do, even ones opposed to Obamacare – the usual something for nothing crowd.

If health care were the single voting issue I doubt people would vote Medicare – Single Pay. As long as employer subsidized tax free coverage is the dominate “devil you know” single pay through Medicare will have to be gradual. I just hope I don’t go broke first paying for a system twice as expensive as other world systems.

Aquifer
Guest
Aquifer

Employer healthcare coverage is getting sparser and sparser and poorer and poorer – with more and more of the cost in premium, deductible and co-pay being shifted to the employee. And, ironically, under Obamacare, more and more employers may be tempted to just “pay the fine” and wash their hands of the whole mess. When more and more folks are apprised of the fact that single payer – even with a higher payroll tax, would take less out of their pocket to pay for health care than they are faced with now, methinks the tide will turn more and more… Read more »

John Ballard
Guest

@Aquifer Employer healthcare coverage is getting sparser and sparser and poorer and poorer etc. Exactly. And that will ultimately be part of the solution. The main reason America’s per patient medical expenses are the highest in the world is not because we have the best system (outcomes are middling to poor by most metrics, especially infant mortality, life expectancy and a raft of chronic conditions) but because patients and their families have very little “skin in the game. Why? Because employer subsidies are a business expense, employee premiums are tax-advantaged, Medicare and Medicaid are tax dollars being redistributed and insurance… Read more »

Aquifer
Guest
Aquifer

Mr, Ballard – disagree, methinks the reason that expenses are so high is that the providers, not the payers, are holding the reins – charging what the market will bear, and folks need healthcare, so they will pay through the nose, to the point of bankruptcy, to get it … Ironically with multiple insurers, none has enough clout to deal with providers – which is where the prices are set – with a single insurer or single payer, providers will have to take what they can get …. That’s one part – the second part is the profit margin of… Read more »

Aurthur
Guest
Aurthur

1) Delusional! You use some form of the term insurance 27 times in this “piece”. There is no insurance in obamacare as there is no risk assessment mechanism. Rather, obamacare will be prepaid, subsidized medical claims partial provider payment. 2) Outdated! You use the term exchange 19 times. If you did not get or read the memo, obama says these are to be referred to going forward as market places. You know like law #7 “All animals are equal.” has now been changed to… “All animals are equal, but some animals are more equal than others”. Looks like J.D. (noted,… Read more »

BobbyG
Guest

So, you’re gonna nit-pick over the use of a couple of terms? At least we can assess who Mr. Klienke is, and what his credibility is with respect to economics (of which “insurance” is a component).

Unlike you. “Aurthur”

Aurthur
Guest
Aurthur

Let’s not bicker and argue about who killed who…or insurance and exchanges. People said I was daft to build my exchange in the swamp of DC, but I’m building it anyway.

Peter1
Guest
Peter1

“There is no insurance in obamacare as there is no risk assessment mechanism.”

Bought time. Now we can focus on treating patients.

Brian McKenzie
Guest

Cheer up – it will fail. It has the same fictitious underwriting that the housing collapse did – based on incremental factorial derivative occurrences for transactions rather than actual underwriting criteria as a normal insurance market would. Forced fixed premium for five years, regulated 85/15 MLR’s, mandated ‘free’ services, decreased CMS reimbursement levels, the swelling trend of retiring baby boomers, the droves of newly minted ‘enrollees’ and the uncounted ‘ undocumented’ it is a cut from both sides: Increased consumption / decreased reimbursements. It falls on its own weight – give it five years – and it is dead; unfortunately… Read more »

BobbyG
Guest

And, why have “they” planned this? Who are “they”? “They” have a plan for avoiding this collapse? Profiting from it?

Are “they” the “1 percenters”? The “0.1 percenters”?

How, precisely, will they safely prosper amid the catastrophe?

Peter1
Guest
Peter1

” It has the same fictitious underwriting that the housing collapse did – based on incremental factorial derivative occurrences for transactions rather than actual underwriting criteria”

BobbyG, I think it’s the same “they”. In fact the financial collapse “they” did profit from their own fraud thanks to friendly (and scared) politicians.

BobbyG
Guest

I know just a bit about those “they”-

http://bgladd.blogspot.com/2008/12/tranche-warfare.html

Brian McKenzie
Guest

“prudently leveraged purchases of tangible hard assets such as housing and productive capital business equipment (rationally vetted and priced for the risk of loan default) are a far cry from the wholesale unsecured and increasingly unregulated leveraging of inscrutable (and ultimately intangible) iteratively aggregated-disaggregated-reaggregated debt instruments such as the built-for-flipping-and-fees securities that have now put our economy in the ditch.” Those – ‘they’ indeed. Great article: and no, we didn’t learn a damn thing – and since you are in the EMR/EHR field – I think you are at the epi-center for ripe the fodder for your next article. That… Read more »

Patrick Pine
Guest
Patrick Pine

The worst possible thing that critics of PPACA could have done is have partisan opponents call for a delay of exchanges/expansion – as Gov. Jindal did on Meet the Press today. I have suggested that the Administration consider delay for different reasons – mainly that if the exchanges are rolled out next October and are not very functional I believe the general public will quickly turn negative – looking at the exchanges in the same way people look at DMVs in nearly every state. And if the public turns against the law that will set the cause of reform back… Read more »

Aquifer
Guest
Aquifer

Patrick – if you fear that “it looks great on paper but will fall years behind schedule, suffer multiple failures, incur huge cost overruns” wouldn’t it be better for the public to turn against it ASAP so we can scrap it and get something that WILL work?

Your “support” for the Pres, is just what TPTB were/are counting on to keep folks from looking at, and working for, the only thing that will have any chance of working – Medicare for All ….

joe
Guest
joe

JD- disingenuous to say that all are being put on the same starting line — the law and its regulations are specifically designed to NOT have all on the same starting line… whether it is waivers or rules and costs that only the few big companies can comply with, or the rules that self-funded companies are exempt from… You can try to rewrite history– but proponents made claims that opponents said were factually untrue and a fantasy — on nearly every front — the opponents have been correct… I could go through the policies one by one… guaranteed issue for… Read more »

Aquifer
Guest
Aquifer

Joe – methinks the proponents can be divided into roughly 2 categories – 1) the ones who worked out his mess to satisfy the demands of their funders – insurance, Big Pharma, et.al. – who knew damn well who the beneficiaries would be, who knew that for their funders to BE the beneficiaries, the public could not be, who knew, however that they had to put some lipstick on this pig to have something for their PR to stick to. 2) the Dem fans for whom their hero could do no wrong and who jumped into the fray in support… Read more »

Zac Smulski
Guest

J. D., I completely agree with your thoughts regarding health care reform, the government should just “make it work” and that “success is the best form of political revenge.” But I do hope the government doesn’t mind a little competition that may just blow the doors off their design model. Rooting for health care reform to succeed is a little like rooting for the Washington Generals to win. Yes, they look like a basketball team, they play like a basketball team, they do the X’s and O’s like a basketball team, but yet, somehow, they can never beat their more… Read more »

J.D. Kleinke
Guest

I’d love to see you win that bet. Zac. I assume you’re talking about the retail medicine markets at both the high and low ends – for primary care, TakeCare and MinuteClinic over here, and concierge over there? That would be great. And true systems for the big stuff. All of those who actually work great on the delivery system levels and are compatible with the ACA – mostly because it’s really just health insurance market reform. A big enough hill for all of us to get over: restore the risk pool, outlaw pre-existing conditions, standardize coverage so that plans… Read more »

joe
Guest
joe

ps- Joe- you are making an argument for stagnation –let everybody sell the same Volga, and try to make it with cheaper parts to make a profit…

quality and innovation on services, combinations of care, delivery styles, all matter — and having any one group make an arbitrary and politcally driven decision to determine what the ‘it’ (coverage) is, will fail… just as it has failed in every other aspect of the economy throughout history…

Curly Harrison, MD
Guest
Curly Harrison, MD

The bureaucracy is massive, beginning with having thousands of health care professionals and business having to reapply on a 28 page application that was devoid of prior information, for the privilege of taking care of patients with Medicare.

BobbyG
Guest

Welcome to The Idiocracy.

As I expressed it on YouTube, via my Epistemic Hairball All Star Shoe Band:

http://www.youtube.com/watch?v=gR-w9LLpieM

J.D. Kleinke
Guest

99% of us are coerced into health care system participation when we are born. Chrisitian Scientists go EMTALA makes sure that the system can’t boot us out, even if it only staunches are bleeding long enough to stumble back into the street to live free or die one more day.

J.D. Kleinke
Guest

Oops…return key accident alert. How about “99% of us are coerced into health care system participation when we are born. Chrisitian Scientists go to jail when they’d rather prove your point by allowing their children to die of treatable illness. EMTALA makes sure that the system can’t boot us out, even if it only staunches OUT bleeding long enough to stumble back into the street to live free or die one more day. See my https://thehealthcareblog.com/blog/tag/jd-kleinke/ on here.

Maxwell
Guest
Maxwell

Off topic warning here. I have a grad degree in clinical psychology and would love to change careers and get involved in supporting healthcare innovations, like those suported by the ACA. Does anyone know about scholarships or other funding to support education in this field. With the system going through such a big transition, you would think there would be scholarships somewhwere. Any ideas?

MD.MA
Guest
MD.MA

We are coerced into the healthcare market only as far as we are coerced into being human. To call it “coercion” is to suggest that there is something about being human that goes beyond, well, being human. Aren’t we “coerced” into the food market and housing market and clothing market when we’re born, too? Does that mean that food, housing, and clothing should be designed and controlled by governmental force? Free enterprise has done a pretty good job of supplying food, housing, and clothing without any intervention by coercive government. We aren’t coerced into a healthcare market. We are blessed… Read more »